COVID-19 Pandemic: MD Aid to Businesses
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On 23 March, 2020, Governor Hogan announced an expansion of restrictions on gathering, ordering non-essential businesses to shut down, and also several new programs to assist businesses that will be harmed by these shut down orders.
As of the date of this article, several of these programs, now only 14 business days old, have already been exhausted. It is hoped that the General Assembly will vote to add more funds to these programs.
Before getting into the programs themselves, I first want to cover the mechanics of the State of Maryland's business portal.
In the same way that the federal government has the Department of State, Maryland has the State Department of Assessments and Taxation (SDAT). Most states have some version of this agency, though they call it something different. For example, the Commonwealth of Virginia has the State Corporation Commission (SCC).
The MD SDAT administers corporate charters, collects information for tangible personal property tax, and also adminsters real estate tax.
The SDAT recently launched a business portal called 'eGov' or 'Maryland Business Express' Here is the URL.
At our firm, we use this portal as well as the business entity search feature to prepare the annual corporate charter renewal forms that are due each 4/15, and extendable to 6/15.
If you're going to apply for any of the funding programs offered through the State, you'll need to have a profile for your business on this portal. It doesn't take long to register.
Overview of the programs:
There are three offered by the MD Dep of Commerce and one offered by the MD Dep of Labor.
MD Dep of Commerce:
$10K Grant
$50K Loan
$100K Loan for Manufacturers
MD Dep of Labor:
$50K Layoff Aversion Fund
Things to note:
The Dep of Labor program requires an application through the MD Dep of Commerce. The MD Dep of Commerce' application asks if one will also apply for federal funds. In other words, you'll need to establish a profile for your company on the eGov portal.
The application for the MD Dep of Commerce was relatively straight forward.
You'll need to be able to document how the virus has impacted your business. For example, if you had contracts and those contracts were cancelled due to the virus, the emails or notifications of those cancellations will provide that documentation for you.
You'll also need a set of financial statements for 2018 and 2019. At the risk of sounding like a shameless plug, I can say that for those clients that have joined us on Xero and our cloud accounting program, we've been able to make these applications in relative ease. For those clients that are still using the old desktop software, it's been a struggle.
You'll also need a Form W9 which can be downloaded for free from the IRS here.
The $10K grant is just that; a grant - meaning it does not have to be repaid, though it may be subject to income tax.
The $50K loan is just that; a loan.
Both of these programs were closed as of Tuesday 7th April at 17:00. Again, the reason for covering them here is that there is hope that the funds will be re-opened. And if they are not, it's still useful in learning how the funds were administered because similar programs may be enacted in the future.
The MD Dep of Labor's Layoff Aversion Fund has been closed due to funding exhaustion, at the time of typing this article. As in the other funds covered above, this happened in about 14 business days.
It's important to note that the Layoff Aversion Fund was not meant to be used for rent or payroll. It was meant to enable a business to not have to resort to layoffs - as the title suggests.
Funds could be used for buying computers and software to enable employees to WFH (work from home - an acronym I didn't know 4 weeks ago). Funds could be used to retrain employees whose positions they were hired for were rendered moot by the shut down orders into new roles.
The application for this program was a relatively simple excel worksheet that asked how an employer intended to make use of the funds and then a specific plan of action once funding was approved. This application is on top of the Dep of Commerce' application through that agency's portal, as discussed.
If an employer had signed up for the Dep of Labor's Worksharing Program, then funds from the Layoff Aversion Program could be used for payroll.
Lastly, the MD Dep of Commerce' manufacturing aid program is still active, at time of typing. Here is the URL for the application.
Funds, in the form of a grant, of up to $100,000 are available to assist Maryland based manufacturers to either increase capacity or pivot to provide critically needed items.
The examples cited by Governor Hogan on 3/23/20 were how certain Maryland distilleries had switched over from making drinking alcahol to hand sanitizer.
Concluding thoughts:
In times of such economic stress, it's important to be tenacious, to 'not go gently into that good night.'
In the long run, this virus will run its course, the emergency orders will lift, but life will not return to the normal we once knew. There will be a new normal. We will carry the scars of this with us for the rest of our lives, as did our grandparents carry the pain of the Great Depression with them.
As business owners, every challenge must be seen as an opportunity. This isn't to speak from a point of opportunism, but from a point of optimism. My definition of optimism is simply the belief that we have the tools we need to overcome the challenges thrown our way. While we might not have everything we need as individuals, we have what we need collectively.
What needs will exist in this new reality? How can your business evolve to identify and fill those needs? Be creative. Be tenacious. The answers will come. We're here to help.
Thank you again for this opportunity to serve.
Stay safe and wash your hands.
Sincerely,
Jonathan Rivlin, CPA
President
The Rivlin Group PC
Disclaimer:
The purpose of this article is for informational/educational use only. No client relationship is intended by virtue of your use of this article. This article cannot be relied on for official advice regarding your specific situation, and is meant only to be general in nature. Because the regulatory environment is so dynamic at this time, it is possible that the content in this article will be superseded. This article was drafted on 9th April 2020.